Rangebound volatile moves are troubling the traders and we expect the scenario to continue in the coming week as well. Nifty is likely to oscillate in the range of 10,980-10,550, says Manali Bhatia of Rudra Shares and Stock Brokers.
The roller coaster ride ended on a positive note on Friday’s session and Nifty ended the day’s at 10,727.35. The previous week's fall is a mirror image of last week of December, where a sharp decline of two consecutive days was arrested at 50-Day Moving Average and witnessed bounceback.
Rangebound volatile moves are troubling the traders and we expect the scenario to continue in the coming week as well. Nifty is likely to oscillate in the range of 10,980-10,550.
Bullish candlestick pattern on the daily chart at 50-DMA suggests a bounceback is expected till 10,875, which if trades on higher side could further accelerate the bulls till 10,980. On the other hand, support for the week exists at 10,550 and 10,380.
Option chain infuses a positive bias as 10,700 put options has witnessed fresh writing of more than 3 lakh contracts. But significant cumulative open interest in 10,900 and 11,000 call option suggest upside is limited and a high degree of caution is required at upper levels.
New trending move is expected only if the index trades 10,980-11000 range on higher side decisively. Until then, countertrend trades will keep providing trading opportunities inside the range.
Taking a long-term view, we believe recent fall is a correction in an ongoing bull run. Though the general election will be a major trigger in 2019, any negative surprise in its result is likely to deteriorate the trend on a temporary basis only.
In that case, 9,500-9,119 could emerge as an important support range. On the other hand, if the result meets the market expectations then 12,900 and 13,500 is easily achievable.
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